Stimulus package has tax breaks for parents of college students
on Tuesday,April 14,2009 21:04
As the tax filing deadline approaches, one expert has offered advice on how parents who help finance their children''s education can claim a new tax credit provided for in the stimulus package.
Writing for Forbes.com, Troy Onink, a college funding consultant, singles out the American Opportunity Education Tax which, unlike earlier tax credits, can also benefit middle-income families.
Onink stresses the new tax credit, which is an expansion of the Hope credit, does not replace the existing $2,000 Lifetime Learning tax credit or the $4,000 above-the-line deduction for tuition and fees.
However, families can only claim one of these breaks per student, and -Onink suggests - most will benefit from opting for the expanded Hope.
That is because the new credit reduces the federal tax bill up to $2,500 whereas a $4,000 deduction, which reduces taxable income, can save families at most $1,400 in federal tax.
Finally, the tax benefit is available to students at nearly all accredited public, nonprofit and private higher education institutions provided they are enrolled at least part-time.
Passed on February 13, the economic stimulus package also includes enhancements to Section 529 college savings and raises the minimum level of the Pell grant from $4,731 to $5,350 starting July 1 and to $5,550 in 2010-11.
Latest Articles & News
Kanye West to perform during Paris Fashion Week
It is no secret to many that music artist Kanye West is no stranger to fashion, and now he will be showing his new collection during Paris Fashion Week later this week, according to the Elle Magazine.
Second designer chosen for home decor competition
Teenlike.com, an ongoing online competition for young home decor designers, announced its second winner. Brandon Dover of Apply Valley, California, was this year's winner, as he created an abstract pen and inkwork design for a bedspread.